Stay Ahead: Student Loan Debt Relief

The U.S. Department of Education is now offering Federal Student Loan Debt Relief. This program allows eligible borrowers to fully or partially forgive loans of up to $20,000 for federal Pell grant recipients and $10,000 for non-Pell grant recipients. Pell Grants are available to low-income students under FAFSA.

The application can be filled in studentaid.gov/debt-reliefThe application will be completed in about 5 minutes. This is a one-time debt forgiveness. Applications will open for her in early October and will close on December 31, 2023. You do not need to submit any documents with your application, but the Department of Education may contact you for more information.

Not everyone is eligible for student loan forgiveness. First, there is an income limit. The individual must have earned less than $125,000 in 2021 or 2022 from IRS Form 1040. For family members, the maximum income limit for 2021 or 2020 is $250,000 for her.

People are also reading…

Private loans (loans from financial institutions, not the federal government) are not eligible for debt relief.

Debt relief applies only to loan balances prior to June 30, 2022. This includes Direct Loans (William D. Ford), FFEL Loans (Federal Family Education Loans), Perkins Loans, Parent or Alumni PLUS Loans. Loans may or may not be subsidized by the government.

New loans originated (loan funds received) after July 1, 2022 are not eligible for debt relief.

Defaulted (unpaid) federal loans are also covered.

Summary loans are a little more complicated. This means that multiple loans are combined, so a person has to make monthly payments only once. Federal Student Loan Consolidation combines multiple federal loans into a single federal loan through the Department of Education. These loans qualify for the Debt Relief Program.

Private lenders offer private student loan consolidation, also known as student loan refinancing. We encourage you to consolidate your private loan into one of these programs for a lower interest rate and switch to monthly payments. These loans are not eligible for the debt relief program.

Private loans cannot be transferred to the federal government, but federal and private loans can be combined with private lenders. If you do this, you will not be eligible for federal loan debt relief. The Department of Education is still negotiating with private lenders to see if this can be changed, so anyone with this type of consolidation loan should keep an eye on whether this is resolved. I have.

Another complication relates to the fact that payments were suspended during the COVID pandemic. From March 13, 2020 to December 31, 2022, borrowers were not required to make student loan payments. If you make federal student loan payments during this period, the government will refund the amount you paid and cancel the loan up to the maximum debt relief amount.

StudentAid.gov Helps you complete online forms and answer questions related to your particular borrower’s situation. Contact an agency at 1-833-932-3439.

The Department of Education issued several warnings about fraud from companies that help process loans and apply for fees. You don’t have to pay for federal student aid assistance. As with all scams, it asks for personal information and a password. please do not! If the government wishes to contact borrowers, they will send an email from the following address. noreply@studentaid.gov, noreply@debtrelief.studentaid.govAlso ed.gov@public.govdelivery.com.

Leave a Comment